More gloom for Germany as trade surplus shrinks

FRANKFURT: Economic gloom over Germany deepened on Thursday as the eurozone crisis caused its trade surplus to contract in September, official data showed.

The German economy, the biggest in Europe, exported goods worth 92.5 billion euros ($118 billion) in seasonally-adjusted terms in September, a drop of 2.5 percent from August, the national statistics office Destatis said.

Imports were also lower, slipping 1.6 percent to 75.5 billion euros, so that the seasonally-adjusted trade surplus fell to 17 billion euros in September from 18.2 billion euros in August.

Economists said the data provided further evidence that Germany's previously impressive resilience to the long-running debt crisis is finally crumbling.

The plunge in exports was "the fastest decline since December. And imports are also deteriorating rapidly," said Natixis economist Sylwia Hubar.

"Germany as an export-oriented economy is affected to a large extent by the eurozone debt crisis. The subdued demand from the main trading partners will keep weighing significantly on German exports as long as the debt crisis is not resolved and the uncertainty keeps prevailing on markets," she said.

The expert said she projected "flat quarter-on-quarter growth in the third quarter."

Commerzbank economist Ulrike Rondorf said there "are growing signs that gross domestic product is likely to contract noticeably in the fourth quarter after a small plus in the third.

"That said, exports are not so much to blame for the current economic weakness, but rather falling investment," she noted.

Unlike most of its European neighbours, Germany has been spared the worst of the long-running debt crisis thanks to deep and painful structural reforms implemented a number of years ago.

It clocked up growth of as much as 4.2 percent in 2010 and 3.0 percent in 2011.

But growth has been slowing this year. After expanding by 0.5 percent in the first quarter, the economy grew by 0.3 percent in the second quarter and growth looks set to slow again in the third quarter.

Taking the nine months to September as a whole, German exports still managed to rise by 4.1 percent to 825.9 billion euros, the statistics office Destatis calculated, while imports were up 1.2 percent at 682.4 billion euros.

That meant the unadjusted January-September trade surplus increased by 143.4 billion euros from 119.1 billion euros a year earlier.